History
Fortune Natural Resources took tiny stakes in oil and gas wells, could not afford an audit, filed for Chapter 11 in 2004, and had all its shares cancelled in 2006.
2001-2002: Small slices of exploration
Fortune Natural Resources was a Delaware company that explored for oil and gas without running the wells itself. Its approach was to take very small shares in wells guided by 3-D seismic, which is sound-wave imaging of rock underground. In April 2001 the Brooks #3 well on the Cadiz prospect in Bee County, Texas, logged about 55 feet of net pay (rock holding oil or gas) in the Slick sand. Fortune held only 6.5625% and its share of the cost was about $53,000.
Its best result came in June 2001. The Dill #13-9, its first exploratory well at West Pointe in Clay County, Mississippi, logged 161 feet of apparent pay across three sands. Fortune held 20% for about $150,000. Reprocessed seismic at La Rosa also yielded five new prospects.
In July 2002 came a discovery at La Rosa C-8, with 22 feet of pay flowing about 400 Mcf (thousand cubic feet) of gas a day, for a Fortune cost of $26,000 on a 10% interest. In February 2002 Fortune had also bought a 25% interest and co-operator role in reprocessing a major oil company's 48,000-mile seismic library, a large undertaking for so small a company.
2003-2006: Unaffordable audit, bankruptcy and end
The strain showed in May 2003. Fortune disclosed it could not afford an audit of its 2002 accounts and had chosen to spend the money on exploration instead. Grant Thornton resigned on 2 May 2003. Both sides confirmed there was no accounting dispute, and Fortune said it hoped to re-hire the firm, which it never did.
On 1 June 2004 Fortune filed for Chapter 11 bankruptcy protection in the Eastern District of Louisiana, keeping control of its assets with no trustee appointed. Its first monthly report showed $5.9 million of assets against $6.1 million of debts. Over its life it had raised $31.6 million from shareholders, against an accumulated deficit of $32.2 million.
After nearly two years, the court confirmed Fortune's plan on 10 April 2006, effective 21 April. Every share and other ownership interest was cancelled, and shareholders recovered nothing. On 1 June 2006 Fortune deregistered its securities and stopped filing reports with the SEC.
Written from the 7 story beats below (2001 to 1 June 2006), which come from the company's own announcements and filings.